International Wire Group, Inc. Reports Results for the Second Quarter and First Six Months of 2001

    ST. LOUIS--August 14, 2001--International Wire Group, Inc. today reported its financial results for the second quarter and six months ended June 30, 2001. During the quarter, earnings before interest, taxes, depreciation and amortization (EBITDA) were $18.6 million, a decrease of $7.6 million, or 29.0%, from the second quarter of 2000. EBITDA for the first half of 2001 was $35.9 million, a decrease of $15.4 million, or 30.0%. These declines in EBITDA were primarily due to the weak general economic conditions in the United States and the corresponding reduction in demand for the Company's products.
    Net sales for the quarter were $115.7 million, a decrease of $29.8 million, or 20.5%, compared to the three months ended June 30, 2000. This decrease in sales was primarily the result of lower sales volume from weak general U.S. economic conditions and a lower average cost and selling price of copper. In general, the Company prices its wire products based on a spread over the cost of copper, which results in a decreased dollar value of sales when copper costs decrease. The average price of copper based on the New York Mercantile Exchange, Inc. ("COMEX") declined from $0.80 per pound during the three months ended June 30, 2000 to $0.75 per pound during the three months ended June 30, 2001.
    The company's income (loss) from continuing operations before income tax provision and extraordinary item was ($2.3) million and $7.5 million for the second quarters of 2001 and 2000, respectively. The 2001 results include an unusual one-time charge of $2.6 million, before tax benefit, related to the realignment of production including certain plant closings. There was no such charge in the second quarter of 2000.
    The net loss for the second quarter of 2001 was $1.3 million compared to net income of $4.2 million during the second quarter of 2000.
    Net sales for the six months ended June 30, 2001, were $240.4 million, a decrease of $49.7 million, or 17.1%, compared to the six months ended June 30, 2000. This decrease was primarily the result of lower volume from the weak general economic conditions in the U.S., including reduced customer demand from customers supplying the automotive and electronic/data communication markets, and a lower average cost and sales price of copper. The average price of copper based on COMEX declined from $0.81 per pound during the six months ended June 30, 2000 to $0.79 per pound during the six months ended June 30, 2001.
    EBITDA as a percentage of sales decreased to 14.9% during the six-month period ended June 30, 2001 from 17.7% for the comparable 2000 period. This change was due primarily to lower pricing under new agreements with customers who supply the automotive industry and operating inefficiencies associated with lower production levels. These operating inefficiencies have been partially offset by headcount reductions, plant closures and other cost reduction and containment actions.
    The company's income (loss) from continuing operations before income tax provision and extraordinary item was ($5.9) million and $9.5 million for the first half of 2001 and 2000, respectively. The 2001 results include an unusual one-time charge of $5.7 million, before tax benefit, related to the realignment of production including certain plant closings. There was no such charge in 2000.
    The net loss for the six months ended June 30, 2001 was $3.4 million compared to net income of $5.6 million during the comparable period of 2000. The 2000 net income included income from discontinued operations of $3.6 million, net of tax provision, and an extraordinary charge of $2.7 million, net of tax benefit, related to the early retirement of debt.
    David M. Sindelar, Chief Executive Officer, said, "International Wire felt the impact of the slowdown in the U.S. economy in the first half of 2001. During this period, we began realigning our production capacity and reduced operating costs. These actions will better position the Company when economic conditions improve and for the long-term."
    International Wire Group, Inc., headquartered in St. Louis, Missouri is a leading designer, manufacturer and marketer of wire products, including bare and tin-plated copper wire and insulated copper wire. The Company's products include a broad spectrum of copper wire configurations and gauges with a variety of electrical and conductive characteristics that are utilized by a wide variety of customers primarily in the appliance, automotive, electronics/data communications and general industrial industries. The Company manufactures and distributes its products in 25 facilities strategically located in the United States, Italy, France and the Philippines.

    This press release contains forward-looking statements as defined by the federal securities laws and such statements are based on International Wire Group, Inc.'s current expectations and assumptions, which are inherently subject to various risks and uncertainties that could cause actual results to differ from those anticipated, projected or implied. Certain factors that could cause actual results to differ are indicated in International Wire Group, Inc.'s filings with the Securities and Exchange Commission.